General insurance breach reports to ASIC rise
General insurance (GI) accounted for 28% of breach reports submitted to the Australian Securities and Investments Commission (ASIC), beaten only by credit product lines’ 32% during the 12 months to June 30.
The GI figure represents a nine percentage point increase from the previous reporting period, according to ASIC’s latest reportable situation regime publication.
ASIC says the GI increase was primarily driven by a rise in reports about motor vehicle insurance (18% of total reports), home building insurance (8%) and home contents insurance (6%).
Life insurance made up 2% of self-reported breach matters, similar to the prior year.
The reportable situations regime, often referred to as breach reporting, commenced on October 1 2021 and is more expansive in scope than its predecessor, taking in recommendations from the Hayne royal commission’s final report.
ASIC is required to publish information about the reports it receives from Australian financial services (AFS) licensees and Australian credit licensees (credit licensees) about self-reported matters (reportable situations).
For the latest reporting period to June 30, ASIC says 16,836 reports were made, averaging around 1403 reports per month. This was a 43% increase in the monthly reporting average from the previous reporting period.
About 9% of the licensee population lodged reports, which is still much lower than expected. ASIC says it will taking stronger measures to achieve enhanced compliance with the regime, including by undertaking a range of surveillance activities and potential enforcement action.
Some 71% of all reports were lodged by just 21 licensees and these were generally larger licensees.
“The reportable situations regime has now been in place for over two years, and licensees have had ample time to take the necessary steps to ensure full compliance with the requirements,” ASIC Chair Joseph Longo said.
“ASIC will now move to taking stronger regulatory action to drive improved compliance with the regime, including enforcement action where appropriate.”
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